Where’s Waldo? An example of pattern recognition. Back-testing and optimizing with Python.
Tom Demark, the renowned famous technical analyst has created many successful indicators and patterns. Among his many discoveries, he came up with 7 different price patterns that he dubbed as “Waldo patterns”.
Inspired by the cartoon Where’s Waldo? Tom has developed these patterns to find short-term tops and bottoms. Any trader or even a receiver of such information would be excited knowing about this, but with hindsight and confirmation bias, the person seeing this, will test the patterns on the chart and focus on the ones that work while disregarding the ones that do not. The only way to remedy this problem is by developing a systematic trading strategy based on these patterns, and that is precisely what we are going to do.
I have just published a new book after the success of New Technical Indicators in Python. It features a more complete description and addition of complex trading strategies with a Github page dedicated to the continuously updated code. If you feel that this interests you, feel free to visit the below link, or if you prefer to buy the PDF version, you could contact me on Linkedin.
